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KAI RYSSDAL: It's not just donors asking big questions this holiday season. Some charities have big concerns as well -- religious organizations in particular. During the campaign Barack Obama said he'll expand the government support for them that President Bush started. With one change: He'll prevent religious organizations that take taxpayer money from refusing to hire employees who aren't Christian.

Marketplace's John Dimsdale reports.

JOHN DIMSDALE: Each day, about 3,000 kids from low-income families get a free meal from the Shepherd Community Center, a Christian charity in Indianapolis.

Jay Height is the Center's director.

Jay Height: The tragedy of hunger in America is that 8 out of 10 kids in this neighborhood will not get two meals a day if they're not at school.

Three years ago, Shepherd Community got a federal grant to expand its capacity. That money is about to run out and the center would like to reapply for another contract. But Jay Height says he won't if the next president does what he says he'll do -- prohibit Shepherd from hiring only Christian employees.

HEIGHT: We do what we do out of our faith. That is what drives us. And we would expect those who serve alongside us to share that faith. And so we would not pursue any kind of funding that would limit our ability to do that.

Before President Bush's faith-based initiative, the government didn't specifically recruit religious groups to provide social services. But that changed under Bush, who set up an office to promote partnerships for community services like homeless shelters. The religious organizations wanted the right to hire only like-minded workers.

STANLEY CARLSON-THEIS: For a faith group, faith is what defines who they are. And why they do what they do and so on.

That's Stanley Carlson-Theis at the Christian think tank Center for Public Justice.

Carlson-Theiss: And so, for many faith groups it just doesn't make sense to say "Sure, you can take part as a faith group, but by the way, get rid of what makes you a faith group."

But Robert Tuttle, a law professor at George Washington University, says even in cases where Congress insisted on nondiscriminatory hiring by government contractors, the Bush administration defended hiring on the basis of religion as legal.

ROBERT TUTTLE: The debate over faith-based hiring is really an offshoot of the debate about how much government should be involving intensively religious organizations in social welfare services. Once you have organizations that see not just sort of the provision of services, but the transformation of souls as a core part of it then this conversation or this debate is going to come along with it.

President-elect Obama headed a religious community group himself back in the 1980s, and says he'll increase funding for faith-based service providers, but only if they accept hiring rules just like everybody else.